The limits of poverty reduction in support of climate change adaptation

The relationship between poverty and climate change vulnerability is complex and though not commensurate, the distinctions between the two are often blurred. There is widespread recognition of the need to better understand poverty-vulnerability dynamics in order to improve risk management and poverty reduction investments. This is challenging due to the latent nature of adaptive capacities, frequent lack of baseline data, and the need for high-resolution studies. Here we respond to these challenges by analyzing household-level data in Northeast Brazil to compare drought events 14 years apart. In the period between droughts, the government implemented an aggressive anti-poverty program that includes financial and human capital investments. Poverty declined significantly, but the expected reduction in vulnerability did not occur, in part because the households were not investing in risk management strategies. Our findings complement other research that shows that households make rational decisions that may not correspond with policymaker expectations. We emphasize the need for complementary investments to help channel increased household wealth into risk reduction, and to ensure that the public sector itself continues to prioritize the public functions of risk management, especially in areas where the social cost of climatic risk is high.